Editorial: Accounting for 40B

The words are like a searing profanity to many communities in the region: Chapter 40B.

The words are like a searing profanity to many communities in the region: Chapter 40B.

The chorus of local officials calling for the repeal of the affordable housing statute is understandable, given the report from the state's Inspector General that, at least anecdotally, developers are manipulating their paperwork to gouge unlawful profits from the well-intentioned mandate.

But rather than kill the nearly 40-year-old law that has seen the creation of at least 26,000 affordable housing units that may never have been otherwise built, state officials should enforce oversight on unscrupulous developers to assuage cities' and towns' fears that Chapter 40B will be used as an end-around local needs and bylaws in the pursuit of ill-gotten gains.

At a Senate hearing Sept. 15, Inspector General Gregory Sullivan said a report he issued with sweeping recommendations last year outlining abuses has had no impact on tamping down developers' misrepresentation of their profits.

Out of 200 Chapter 40B projects, Sullivan found only 53 submitted the required paperwork for cost certification. Of the ones his office reviewed, Sullivan said, the vast majority included inflated expenses or, most commonly, the cost of land acquisition to hide their profits. Those profits are capped at 20 percent by law, which had been raised from 15 percent after Sullivan's report last year showed similar abuse.

As Sullivan correctly pointed out, that's like raising the speed limit to reduce the number of speeders.

Sullivan said his limited review uncovered at least $6 million in illegal profits and if all 40B projects in the state were reviewed, could go as high as $100 million.

Those anecdotes, however damning, aren't the main reason communities balk at 40B, which allows developers to bypass many local zoning and conservation laws if their project meets the law's guidelines of setting aside at least 25 percent of the units as affordable in a community that has not reached a 10 percent minimum. Most of the time, officials just don't like seeing developers of large, intrusive projects skirt the planning and approval process.

But developers who use 40B only hurt their public image further by cooking the books to evade the profit caps that would otherwise generate new revenue for the communities where they build. Those anecdotes also hurt the efforts by housing advocates on Beacon Hill to keep a worthy program in place.

The best way for communities to deal with 40B is to take the initiative when it comes to affordable housing, by identifying sites where dense housing makes sense and working with developers to make each project a success for everyone.

Reaching the 10 percent goal is possible, even for towns with high property values. Lexington and Lincoln have more than 10 percent affordable housing. MetroWest communities that have immunized themselves from 40B by reaching the goal include Framingham, Franklin, Marlborough, Northborough, Hudson and Boxborough.

Other towns are getting closer to that goal through planning, foresight and negotiation. But the state must do its part to make 40B work by holding developers accountable. The Department of Housing and Community Development, which oversees and certifies 40B projects, hire a compliance officer and organize a staff to undertake a full review of the accounts for 40B projects.